Aviva - Enhanced Lifetime Mortgage

Aviva Enhanced Lifetime Mortgage
  • Rate: 5.13%
    APR: 5.20%
    Exclusive: Yes
    Offers: FREE valuation offer* + upto £1000 cashback + Limited period - £5 application fee** + exclusively reduced interest rates from 5.13% dependent upon personal criteria

Starting out as Norwich Union, Aviva offers over 15 years’ experience in the equity release industry. Aviva provides multiple equity release products to match competitors in the market. Their experience has already helped over 100,000 homeowners with products like the Aviva Enhanced Lump Sum Max and Lifestyle Flexible Option.

The Aviva Enhanced Lifetime Mortgage or hybrid of the Aviva Lump Sum Max plan is designed for individuals with current ailments or a history of poor health issues. Therefore, homeowners with ill-health may be able to release a larger loan to value percentage based on their current health conditions.

Summary of the Enhanced Aviva Lifetime Mortgage
Following consultation with an equity release adviser and poor health has been identified, a health and lifestyle questionnaire would need to be completed which determines the eligibility for enhanced equity release terms.

Should qualification be approved a single lump sum would be released which is then transferred into the homeowners bank account to spend in accordance with their plans. From then on, Aviva will charge interest at a fixed rate for the rest of their lives. This interest compounds each year and continues to do so until the equity release loan is repaid.

During the loan term, borrowers can apply for further borrowing; however this will be based on lending criteria at the time. Therefore, the consumer will need to obtain a revaluation of the property, which will determine how much they can borrow in accordance with their age at that time. As long as the minimum further borrowing limit of £5,000 is met or exceeded then Aviva will agree to a further release of equity on their plan. Any new monies lent will be at the rate applicable at that time.

Following the last surviving dying or moving into long term care, the house is then usually sold within Aviva’s timescales of 12 months & the equity release loan repaid, with any surplus passing into the estate.

Maximum Release of Equity Calculations
Aviva have the same loan-to-value principles as to maximum borrowing requirements which is the older the youngest applicant is, the greater the amount they can borrow. The Aviva Enhanced Lifetime Mortgage plan is no different.

On normal Aviva terms, joint homeowners age 60 would be able to release 24.5% of the property value on the standard Lump Sum Max plan, and up to 40% when aged 75.

However, following qualification for the enhanced lifetime mortgage plan joint applicants can receive an enhanced LTV of upto may receive more than 29% at age 60, and 44% at age 75 respectively.

Criteria of the Aviva Enhanced Equity Release Scheme
The Aviva Enhanced Lifetime Mortgage requires the youngest homeowner to be at least 55. The property value must be at least £75,000 with no minimum named. Please note that Aviva calculates their loans for maisonettes and flats at 85% of the normal value.

Homeowners will receive a minimum of £15,000 with no upper limit on the loan. The home needs to be located in Northern Ireland, Scotland, Wales or England. If the property is leasehold it must come with a minimum unexpired term of 160 years, less the age of the youngest to qualify.

Aviva requires the home to remain the main residence. Homeowners have repayment terms of until death or move to long-term care facility.

All Aviva loans including the Enhanced Lifetime Mortgage adhere to the Financial Conduct Authority (FCA) regulations and the Code of Conduct outlined by the Equity Release Council.

Unique Features of this Ill-Health Mortgage
All past or current illness increases the lump sum amount of the enhanced equity release. The calculation and loan amount awarded is based on age, property valuation, property type, and assessment of current health records.

This loan has a fixed interest rate. Borrowers have 14 weeks from the time their application is submitted to lock in a quoted interest rate. Retirees will know the loan amount to be repaid in full at any point during the loan.

Additional features include an inheritance protection guarantee in which the homeowner can protect part of their asset for their beneficiaries. Inheritance protection must be chosen at the outset of the loan and it will affect the maximum loan amount based on the loan to value calculation.

The Equity Release Council and FCA require all lifetime mortgages to have a no negative equity guarantee. This clause ensures the final balance is never more than the house value.

New Voluntary Repayment Options
Aviva upgraded their lifetime mortgage plans to include enhanced lifetime mortgages. Any new borrower has the option of making 10% of their repayment per annum, without penalty. Homeowners can control their principle and interest balance by repaying early, particularly in choosing how much interest or capital to pay early.

The equity release industry is changing to provide consumers more control over their equity release balances. There is a choice in maintaining a level balance by making interest payments or paying 10% per year to repay the entire scheme off on a fixed term.

This additional feature is available for joint applicants. If one partner dies the survivor can downsize to redeem the impaired lifetime mortgage scheme, all without penalty. Repayment in this instance must happen within 3 years.

Aviva Equity Release Incentives
Incentives tied to the Aviva Enhanced Lump Sum Max include free valuation and up to £1,000 cash back for a limited period.

Certain intermediaries are able to get exclusive equity release deals through Aviva which are aligned to personal criteria such as their age & loan-to-value which can affect the interest rate offered. Call us for more information.